Prime Minister Nguyen Tan Dung has promised to set the price of bio-gasoline E5 lower than that of the country's most popular fuel grade to boost consumption.
The blend, with 5 percent of cassava-based ethanol, will be VND300-500 cheaper than 92-RON, which retails at VND15,670 (US$0.74) per liter, local media reported.
Vietnam’s major cities started selling E5 on a trial basis last year. The rest of the country will follow soon.
Quang Ngai Province, home to the country’s sole oil refinery and one of its three ethanol production plants, initiated the sale on September 1.
PM Dung also ordered the Ministry of Finance to review tax regulations on biofuel to facilitate the switch, including raising export tariffs on ethanol and cassava to keep enough supplies at home for biofuel production.
Researchers at the Hanoi University of Technology found that E5 does no harm to vehicle engines.
They even concluded that vehicles using E5 accelerate faster and have less carbon emission than those powered by 92-RON.